A New Cash Mandate is Coming in 2026. Is Your Business Prepared?

Cash may be making a comeback in Australia with new proposed “mandatory cash” legislation set to come into effect in 2026. But what could these new laws mean for small businesses?

What are mandatory cash laws?

The proposed new cash mandate laws would require businesses to accept cash as payment for groceries, fuel and other items deemed essential. The Federal Government classes essential goods and services as those that are purchased to meet a basic need (food, shelter, healthcare), are required to maintain current living arrangements (car maintenance, school fees), or are a legal obligation (compulsory insurance, stamp duty).

Is cash legal tender in Australia?

Cash is legal tender in Australia. However, there is actually no law that states any business must accept cash as payment. Businesses are free to choose which kind of payment methods they accept, and they can opt to be completely cashless.

What are the cash mandate laws in response to?

The initiative aims to ensure that Australians who rely on physical currency (including older Australians, those in regional areas and people without easy access to digital banking) are not excluded from making everyday purchases. The move is designed to balance consumer choice and protect vulnerable groups in an increasingly cashless society.

As Treasurer Jim Chalmers said in a press release related to the legislation: “Mandating cash for essential purchases means those who rely on cash will not be left behind.”

What businesses will be affected by the new laws?

It should be noted that the government has already flagged an exemption for small business, excluding those that have an aggregate turnover of $10 million per year.

When will the cash mandate start in Australia?

The Treasury department has said that “Final details of the mandate will be announced in 2025. Subject to the outcomes of consultation, the mandate would commence from 1 January 2026.”

So business owners should keep an eye out for news on cash mandating legislation very soon.

Pros and cons of going cashless

There are a number of benefits and drawbacks to taking a business cashless.

Here are some of the pros to consider:

• Faster transactions: Card and digital payments are usually quicker than handling physical cash, which could help to reduce queues and speed up service.
• Simplified bookkeeping: Digital transactions are automatically recorded, making accounting, reconciling sales and filing taxes simpler.
• Improved hygiene: Possibly as a side effect of the COVID-19 pandemic, some customers and staff may prefer not to handle physical money.
• Customer convenience: Many consumers prefer digital wallets and tap-and-go payments, especially younger generations.

A recent survey from money.com.au found that one of the biggest problems businesses face is that while digital payments are on the rise, Aussie shoppers still want to have the option to use cash. The survey respondents also cited that in-store debit and credit card fees are the most hated kind of fees for consumers, above even ATM fees. This could create a poor customer experience for some shoppers and potentially drive away sales.

Some of the other disadvantages of going cashless include the following:

• Excludes cash-preferred customers: Some people may have less choice whether they want to pay by card. Older Australians, rural residents and vulnerable groups (such as those facing financial hardship) often rely on cash, and may not have access to digital payments.
• Risk during outages: Internet or power failures can halt card payments, meaning lost sales during downtime.
• Card fees: Merchant service fees can eat into profits unless passed on to customers, which can cause friction.
• Negative perception: Refusing to accept cash may come across as inflexible or exclusionary to certain groups of people, potentially damaging your reputation.
• Future legal compliance risks: With proposed mandatory cash laws on the horizon, some businesses may be required to accept cash again.

What small businesses should do now

The mandatory cash laws won’t come into play until the beginning of 2026. But there are still things business owners can do now to prepare themselves for the upcoming changes.

Stay up to date on legislation

While small businesses under the $10 million aggregate turnover threshold are expected to be exempt from the mandatory cash legislation, it’s still important to follow any updates closely.

The Federal Government has advised that final details are due to be announced in 2025, so keeping up to date through reliable sources (such as the Australian Treasury website, business advisory services or industry newsletters) can help ensure you’re informed on the latest changes.

Evaluate your payment setup

This is a great time to review how your business handles payments. Are you meeting your customers’ needs? Are you hitting the right balance between efficiency and accessibility?

You don’t have to completely overhaul your system. But even small tweaks, such as introducing a low-fee card processor or simply adding a sign to let customers know whether you accept cash or not, can make a difference.

Consider Money insurance

If you decide to continue accepting cash, then you may also wish to consider how to protect it.

Money insurance covers you in the event business money (cash, cheques, money orders and even things like lottery tickets) is stolen, lost or damaged while on your premises, in transit or temporarily stored in a private residence.

Money insurance is available as part of a Business Insurance Package, which is a tailored insurance pack that allows you to pick and choose the insurance that suits your needs. This could include Money insurance as well as Public Liability, Theft, Building, Contents, Machinery Breakdown or Employment Practices Liability insurance, just to list a few options.

BizCover is here to support small businesses, whether you choose to go fully digital or continue to accept cash. Get a quick and easy quote in minutes and see how much you could save. For on the go cover, go BizCover.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. 

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